Hawaii Is a “Postcard from the Future”

Today, the New York Times published a good look at how Hawaii’s residential solar power industry, the most advanced in the US, is forcing obsolete power companies to change, and how those power companies are fighting back. Regular readers of The Power Line are already familiar with the issues, as well as the Edison Electric Institute’s agenda of sabotaging small scale solar generation.  The Times article about Hawaii shows why the electric industry is fighting a losing battle.

The utility wants to cut roughly in half the amount it pays customers for solar electricity they send back to the grid. But after a study showed that with some upgrades the system could handle much more solar than the company had assumed, the state’s public utilities commission ordered the utility to begin installations or prove why it could not.

It was but one sign of the agency’s growing impatience with what it considers the utility’s failure to adapt its business model to the changing market.

Hawaiian Electric is scrambling to accede to that demand, approving thousands of applications in recent weeks. But it is under pressure on other fronts as well. NextEra Energy, based in Florida, is awaiting approval to buy it, while other islands it serves are exploring defecting to form their own cooperative power companies.

It is also upgrading its circuits and meters to better regulate the flow of electricity. Rooftop solar makes far more power than any other single source, said Colton Ching, vice president for energy delivery at Hawaiian Electric, but the utility can neither control nor predict the output.

“At every different moment, we have to make sure that the amount of power we generate is equal to the amount of energy being used, and if we don’t keep that balance things go unstable,” he said, pointing to the illuminated graphs and diagrams tracking energy production from wind and solar farms, as well as coal-fueled generators in the utility’s main control room. But the rooftop systems are “essentially invisible to us,” he said, “because they sit behind a customer’s meter and we don’t have a means to directly measure them.”

For customers, such explanations offer little comfort as they continue to pay among the highest electric rates in the country and still face an uncertain solar future.

Note the “problem” cited by the Hawaii Electric staffer:

But the rooftop systems are “essentially invisible to us,” he said, “because they sit behind a customer’s meter and we don’t have a means to directly measure them.”

And why is that?  Because the power company has failed to install the digital metering technology that allows the power company to “see” behind the meter systems.  This is not a big deal.  But Hawaii Electric, like all major electric utilities, prefers to fight the solar trend, instead of building a more reliable and resilient distribution grid.

Here is a link to an article about the study that Times reporter Diane Cardwell mentions in her story.  Enphase Energy, maker of micro-inverters and digital management systems, showed that Hawaii Electric’s Colton Ching was simply wrong to claim that the company couldn’t add any new solar generators to its system.

Renewable power company NextEra Energy is showing Hawaii Electric what happens when dinosaurs refuse to change.  They disappear.

Load defection”  is the final threat to Hawaii Electric, that they can do little about:

Installers — who saw their fast-growing businesses slow to a trickle — are also frustrated with the pace. For those who can afford it, said James Whitcomb, chief executive of Haleakala Solar, which he started in 1977, the answer may lie in a more radical solution: Avoid the utility and its grid altogether.

Customers are increasingly asking about the batteries that he often puts in along with the solar panels, allowing them to store the power they generate during the day for use at night. It is more expensive, but it breaks consumer reliance on the utility’s network of power lines.

“I’ve actually taken people right off the grid,” he said, including a couple who got tired of waiting for Hawaiian Electric to approve their solar system and expressed no interest in returning to utility service. “The lumbering big utilities that are so used to taking three months to study this and then six months to do that — what they don’t understand is that things are moving at the speed of business. Like with digital photography — this is inevitable.”

And FirstEnergy Shows Its Hand on HB2201

Today, The State Journal published energy reporter Sarah Tincher’s story on the differing views of HB2201.

In her story, she quoted FirstEnergy PR guy, and our old friend, as follows:

“FirstEnergy is concerned about the way we credit customer generators because we credit them back at a rate that is equal to the retail cost they pay for electricity,” said Todd Meyers, a spokesman for FirstEnergy’s West Virginia subsidiaries, Mon Power and Potomac Edison.

“Those smaller generators get the benefit of using our electrical infrastructure to sell back the electricity they generate without paying to use that infrastructure,” Meyers said. “In principle, we don’t believe it is fair for the rest of our Mon Power and Potomac Edison customers in West Virginia to subsidize small generators.”

So, now FirstEnergy’s PR guy is directly contradicting FirstEnergy’s chief lobbyist Sammy Gray’s statements to the WV House Energy Committee and the WV Senate Judiciary Committee that FirstEnergy interpreted the “cross-subsidization” language in HB2201 as applying only to direct costs of connecting individual net metered customers to a power company.

Has FirstEnergy changed their minds?  Or was Sammy hiding something from WV legislators?

Ms. Tincher does a great job of blowing Toddy’s argument out of the water, by pointing to studies done by PSCs in Missouri and Mississippi:

Among such reports is a Missouri Energy Initiative study, released in winter 2015, which evaluated the benefits and costs of net metering in Missouri, which has a similar fuel mix and retail electricity pricing to West Virginia.

The study quantified the benefits of load reduction and reduced greenhouse gas emissions, in addition to the costs associated with cross-subsidization among consumer groups, and increased administrative costs in managing a new customer class between 2008 and 2012. According to the report, the net effect was positive for the state each year.

The MEI study also suggested benefits of a decentralized energy system, reduced energy prices, local economic boost from manufacturing and installation of net metering systems.

Another study, conducted by Synapse Energy Economics Inc. for the Public Service Commission of Mississippi in September 2014, modeled the costs and benefits of net metering to the state of Mississippi, which doesn’t currently employ a net metering program. The agency’s Total Resource Cost assessment, which included costs of solar panel installation and administrative costs, as well as benefits of avoided costs to the utility, suggested net metered solar rooftop would result in $27 per MWh of net benefits to the state of Mississippi.

FirstEnergy and AEP had better watch out.  If similar studies are done for the WV PSC, they may have to end up paying net metered customers more for their electricity, not less, to pay us for the benefits we give to all customers.  By the way, that is called a feed-in tariff.

HB2201 Now on Gov. Tomblin’s Desk: Veto Needed

HB2201 is back on Gov. Tomblin’s desk.  He has until Saturday to veto it.  He needs to veto HB2201 a second time.  HB2201 is completely unnecessary, because net metering was protected in HB2001, and all of the contents of HB2201 are already covered in the WV PSC’s net metering rules.

The Charleston Daily Mail ran an op ed by eastern panhandle solar power installer Bill Anderson today that does a good job of explaining why Gov. Tomblin should veto HB2201.  His piece contains this common sense nugget:

HB 2201 is not a good bill. Good bills are written to fix a well-defined problem. The purpose of HB 2201 is obscure to both legislators and the public.
A week ago, the Charleston Gazette ran my op ed that provides a little more detail about how HB2201 got so bad.  My piece also shows how AEP and FirstEnergy lobbyists perverted the course of an initially well-intentioned bill.
The result of all this meddling and manipulation is that HB2201 is now a mess that casts a cloud of regulatory uncertainty over business investment and innovation in West Virginia.
And as Mr. Anderson concludes his piece:

I respectfully request that Gov. Tomblin veto this bill again. (He vetoed an earlier version due to technical flaws).

A veto will serve the interests the governor’s constituents and enhance the prospects for private investments in energy generation far into the future.

Electric Industry’s War on Solar Comes to WV

In the fight over preserving net metering, the electric industry’s war on solar, declared in 2013 by the Edison Electric Institute, has come to the WV Legislature.  The war has come in the form of two vague and misleading words, “cross-subsidization”.

As House Bill 2001 moved through the Legislature early in the 2015 session, another bill, HB2201 was introduced.  HB2001 repealed the do-nothing ARPS law that was put in place by then-Gov. Manchin and the coal industry in 2009, but preserved the section of the law that authorized the WV PSC to institute net metering in WV.

HB2201 attempted to add a definition of net metering back into the newly constituted net metering law preserved in HB2001 .  However, that definition was slightly modified to add new restrictions on which solar power producers were eligible for net metering.  This modification, which changed an “or” to “and” from the definition of net metering which had been in another section of the ARPS law, signaled that AEP and FirstEnergy, the two Ohio-based holding companies that control WV’s electrical system, were going to use HB2201 to perform stealth attacks on net metering that most legislators thought they had “saved.”

When HB2201 passed out of the House, Del. Folk, a Republican from Berkeley County, successfully added an amendment to the bill which read:

The [Public Service] commission shall assure that any net metering tariff does not create a cross-subsidization between customers within one class of service.

This was the first time the words “cross-subsidization” had crept into the policy discussion about net metering in WV.  The word “subsidization” is part of the power industry’s propaganda lexicon in its fight against solar power.  It is a buzzword implying falsely that solar power needs subsidies to compete “in the marketplace” with fossil fuel power, which is portrayed as requiring no subsidies.

This characterization is particularly ironic in WV considering that the WV PSC has just saddled WV rate payers with huge subsidies to protect AEP’s Mitchell Plant near Moundsville and FE’s Harrison Plant near Clarksburg from having to compete in wholesale energy markets with lower priced alternatives.  The Legislature did its part in 2013 by dumping responsibility for AEP’s failed fuel choices in 2008 onto the company’s rate payers in the form of decades of bond payments to cover AEP’s coal costs with the deceptively named “consumer relief charge.”

Del. Folk’s “cross-subsidization” now joins “free loader” and “standby charges” and all the other propaganda that has been used by power companies in their fights against solar power in Republican-controlled states like Arizona, East Virginia and Wisconsin.

Throughout all solar advocates’ attempts to remove the cross-subsidization language from HB2201, power companies and legislators resisted any change.  In fact, the Senate added a definition of cross-subsidization to the bill which only made matters worse.

To be clear, HB2201 does not direct the PSC to make any changes to its rules concerning net metering.  Nor does the bill require power companies to make any changes in their current rate tariffs.  But the bill does create a legislative directive that could be used the AEP and FE to push for those changes in the future.

The possibility of an attack on net metering is essentially the same as it has always been.  The Ohio holding companies could have tried to add fees or change the way power producers are compensated in the base rate cases both companies filed at the PSC in 2014.  They chose not to attack in those cases, which indicates that attacking net metering is not a high priority for them, right now.

I have personally heard FirstEnergy’s lobbyist tell two different legislative committees that his company only intends the cross-subsidization language to apply to larger solar power systems that might require power companies to change their equipment for interconnection.  When solar advocates lobbied legislators to reflect these statements in changes to HB2201, both FirstEnergy and AEP refused to support the changes.  That is an indication that FirstEnergy is not willing to stand behind the verbal assurances of its lobbyist and may have other things in mind for the future.

So, with HB2201, the WV Legislature has created a classic case of regulatory uncertainty that now hangs over the entire solar power industry in our state.  Hundreds of WV citizens and businesses have made millions of dollars of investment in our state which is now at risk because of sloppy legislating and power company power plays.

West Virginians have one more chance to stop this attack on our state’s future.  Click here to send an email to Gov. Tomblin asking him to veto HB2201 when it crosses his desk in the coming week.  Send your email now, because time is limited.  You can also call the Governor’s Office on Monday morning at 304-558-2000.

Gov. Tomblin Signs HB 2001 Into Law

Gov. Tomblin signed HB 2001 into law today.  The bill repealed the Alternative and Renewable Energy Act of 2009 and replaced it with a statute titled “Net Metering of Customer-Generators,” preserving statutory authority for net metering.

SB 1 remains in the House Energy Committee.  HB 2201, a stand alone bill to insert a faulty definition into the net metering law, remains in the Senate Judiciary Committee.  While it looks more likely that these bills will languish in these committees for the rest of the session, they could be revived and might effect some further changes in the net metering law that Gov. Tomblin signed today.

Thanks to the vigilant and swift acting solar power community in WV, the new net metering law is a great victory for all West Virginians.  As a bonus, the veneer of having something called a portfolio standard has been stripped away from WV’s coal and gas industry controlled state government.

Solar Economics Picking Up Momentum in US

A recent study calculates that home solar power generation is now cheaper than centralized power in 42 of the 50 largest cities in the US.

“Right now, buying an average-sized, fully-financed solar PV system costs less than electricity from their local utility for 93 percent of single-family homeowners in America’s 50 largest cities, and in most places, is a better investment than many of the stocks that are in their 401(k),” said Jim Kennerly, project manager for the Going Solar in America report. “Nevertheless, most people are unaware that solar is this affordable for people of all walks of life.”

Many customers mistakenly think going solar requires having a lot of sunshine. The report points out that solar’s value to the customer is more about how much grid energy it can offset.

One of the fundamental problems here is that most people in the US have a poor understanding of how to calculate the value of different investment options.  High schools, and even colleges, don’t teach basic business math such as calculating net present value.  If you can’t calculate the terms of your own investment, you set yourself up to be exploited by the power companies that benefit from your ignorance.

Solar is not just competitive in markets with high electric rates.

It’s no surprise that places with high electricity rates — New York, Boston and several cities in California — claimed some of the top spots on the list. But the study found that solar is also competitive in Kansas City, Atlanta, Charlotte, Milwaukee, Wichita, Columbus and other smaller markets.

That’s because low electricity prices don’t necessarily mean consumers save money. U.S. Energy Information Administration (EIA) data shows that customer in regions with the lowest rates tend to use the most energy and pay the highest bills. For instance, in 2012, the latest year with vetted data, customers in the South Atlantic region paid 11.4 cents per kilowatt-hour on average and $123 for their monthly bill, whereas customers in New England paid 15.7 cents per kilowatt-hour and only $100 on their monthly bill.

The rate/bill comparison is one I have made on The Power Line in the past.

The report also compared an investment in your own solar power with an investment in stocks.  Low interest rates and investment returns are a big problem for a lot of small investors.  The study shows that in a lot of US cities, investing in your own solar panels is the best way to invest for retirement.

The report finds that for many of America’s 50 largest cities, the net present value of a dollar invested in solar (what the lifetime of the system is worth in today’s dollars) is greater than a dollar invested in the stock market.

In twenty of the 50 cities, customers paying upfront with cash for a 5-kilowatt system will see greater returns than on the stock market over the 25-year life of the system. In 46 of the 50 cities, customers with a fully financed solar project will see better performance than the stock market. Financing over time benefits more people in all cities. San Jose ($23,171), San Francisco ($21,859) and Oakland ($21,839) came out on top.

Nigeria – One of Africa’s Most Prosperous Countries Has Collapsing Centralized Grid

This article from yesterday’s New York Times is a good companion piece to my recent post about Kenya’s M’KOPA.  Nigeria, the subject of the Times article, is more than 2000 miles from Kenya, but both countries are part of the same situation.

Over the last 50 years, African governments have seen the mass availability of electricity as a key to ending poverty in their countries.  The problem is that these governments imported highly centralized systems from the US and Europe.  These systems were expensive to build, and imposed heavy long term debt on Africans.  These systems are also very expensive to maintain.

Although wealthy oil-producing countries like Nigeria have a lot of oil to fuel their generating plants, the same ruling classes that rake off billions from oil exports also fail to invest in the maintenance that these expensive systems require for transmission and distribution.

Here is Mr. Adichie’s description of the situation in Nigeria:

Whenever I have been away from home for a while, my first question upon returning is always: “How has light been?” The response, from my gateman, comes in mournful degrees of a head shake.

Bad. Very bad.

The quality is as poor as the supply: Light bulbs dim like tired, resentful candles. Robust fans slow to a sluggish limp. Air-conditioners bleat and groan and make sounds they were not made to make, their halfhearted cooling leaving the air clammy. In this assault of low voltage, the compressor of an air-conditioner suffers — the compressor is its heart, and it is an expensive heart to replace. Once, my guest room air-conditioner caught fire. The room still bears the scars, the narrow lines between floor tiles smoke-stained black.

Sometimes the light goes off and on and off and on, and bulbs suddenly brighten as if jerked awake, before dimming again. Things spark and snap. A curl of smoke rises from the water heater. I feel myself at the mercy of febrile malignant powers, and I rush to pull my laptop plug out of the wall. Later, electricians are summoned and they diagnose the problem with the ease of a long acquaintance. The current is too high or too low, never quite right. A wire has melted. Another compressor will need to be replaced.

Mr. Adichie is a fiction writer, and his technical analysis is not all it should be in this piece, but he paints a clear picture of a distribution system with extremely poor voltage regulation, due mainly to failures to maintain substations and transformers, as well as deteriorating distribution and transmission lines.

Mr. Adichie describes how urban Nigerians (Rural Nigerians, like rural Kenyans simply have no access to centralized electricity.) cope with their collapsing grid.  He keeps a diesel generator available and runs it regularly.  He also owns a battery bank with an inverter to invert the AC from the central grid to the batteries’ DC current and then back again to AC when he uses electricity in his home.  When the centralized grid is on, he charges his batteries.  When power quits completely, he has some backup capacity.

Mr. Adichie’s personal solutions don’t really solve Nigeria’s electricity problems.  In fact, running his battery charger from the electric grid simply adds more loads to a system already beyond its capacity.  Running a generator simply shifts his energy source to the country’s overtaxed retail diesel fuel system.  Fuel is expensive, and, like Nigeria’s electricity, it’s quality is often poor.

Rural West Virginians face this same bad set of choices when our electrical system fails.  My neighbors immediately fire up their gas generators when Mon Power goes down.  For the next two days, all of the local gas stations run out of gas, because everyone needs fuel to keep their generators running.  The problem is not solved, it is just pushed to a different fragile system.  And people burn even more gas just driving around to find an open gas station.

As I have learned, and as people in rural Kenya are learning, we don’t need to consume massive amounts of electricity.  We just need enough.  When we become wise about what electricity we need, we find that we can produce our own electricity.  That lesson is the same in a Kenyan village as it is in Chloe, WV.

There are more connections between WV and rural Africa than you might think.  New Vision in Philippi, WV is bring solar-powered light and real reliable power to villages from Kenya to Liberia.  They are doing what West Virginians do best, helping their neighbors, even when their neighbors are 5000 miles away.